US Dollar Dominance Under Threat Amid Yuan’s Global Ambitions

The dominance of the US dollar as the world’s primary reserve currency is facing mounting challenges.

With growing debt levels and renewed trade tensions, particularly under Trump’s aggressive tariff policies, confidence in the dollar is beginning to erode—and alternative currencies are stepping into the spotlight.

According to senior economist Hoe Eo Khor, the Chinese yuan is well-positioned to rise as a serious contender. In recent comments, Khor argued that the yuan’s global role could expand significantly if China allows broader access and improves currency convertibility.

“The era of US exceptionalism is fading,” he remarked. “The yuan is evolving, and with liberalized access, it could rival the dollar in global influence.”

However, for the yuan to achieve this, China must deepen its financial markets by offering more yuan-denominated assets—such as bonds and equities—and lift restrictions on currency flows. Khor emphasized that for global investors to trust a currency, it must be both backed by robust financial instruments and freely tradable.

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The dollar’s troubles have been amplified by macroeconomic volatility and a shift in investor sentiment. Rising interest in Bitcoin and gold—both seen as hedges against uncertainty—reflects a growing desire to move away from the greenback.

Bitcoin, in particular, has rallied sharply amid concerns over US fiscal health, with analysts noting a strong correlation between dollar instability and crypto performance. “Instability is Bitcoin’s best friend,” some traders now suggest.

As geopolitical and economic tides shift, the global monetary system may be inching toward a multipolar currency order—one where the dollar no longer stands unchallenged.

Alexander Stefanov